The US Dollar is called the world’s “reserve currency” by the Council of Foreign Relations and has since been the standard for international trade. Countries must possess dollars for foreign transactions and importation, especially in volatile world events. The fundamental strength of the dollar lies in the US economy. It is also considered a safe currency due to its low devaluation risk.
Due to these factors, there is a high demand for US dollars from investors worldwide to secure their businesses. It then becomes a cycle of codependency between dollar demand and usage that fuels the currency’s title as the global currency.
